[2018] FWC 2911

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Aden Rosewarne
v
Spotless T/A Spotless Facility Services
(C2018/746)

DEPUTY PRESIDENT MASSON

MELBOURNE, 22 JUNE 2018

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

Background to dispute

[1] On 14 February 2018, Mr Aden Rosewarne (the Applicant) applied to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s 739 of the Fair Work Act 2009 (the Act) under the dispute resolution procedure in clause 7 of the Spotless Facility Services Pty Ltd (Maintenance) Victorian Enterprise Agreement 2016 (the 2016 Agreement). 1 The Respondent in the matter is Spotless T/A Spotless Facility Services (Spotless).

[2] Spotless is engaged in the provision of facility maintenance services for various contracts across a national portfolio of contracts including within Victoria.

[3] The Applicant was initially engaged by Spotless in Victoria in 2003 as an electrical tradesperson. In June 2016, the Applicant transferred into the role of Facilities Manager for Spotless with responsibility for several contracts including the Coca Cola Amatil (CCA) contract. As the Facilities Manager role was not a full-time position, the Applicant was also required to continue undertaking duties as an electrical tradesperson when not otherwise engaged on Facilities Manager duties. The Applicant is currently classified at Level 4 under the 2016 Agreement’s classification bands

[4] At the time of the Applicant’s dispute notification, the Applicant was receiving a salary of $89,749.92 which was above the then salary bands for the Level 4 classification of $78,399 - $85,024. With the increase in salary bands that were applied under the terms of the 2016 Agreement, the new salary bands for Level 4 effective from 1 April 2018 are $79,967 - $86,725. The Applicant has not received any salary increase during the term of the 2016 Agreement and has initiated a dispute in relation to his not receiving increases he believes he is entitled to under the 2016 Agreement.

[5] The dispute concerns the proper construction of clauses within the 2016 Agreement dealing with the classification of the Applicant and salary increases that the Applicant is entitled to receive under the 2016 Agreement.

[6] The dispute was subject to conciliation conferences before me on 23 February 2018 and 22 March 2018 but remained unresolved at the conclusion of the conciliation process. The matter was subsequently listed for hearing on Monday, 14 May 2018, in advance of which the parties were required to file statements and material on which they intended to rely.

Jurisdiction

[7] Prior to the hearing, Spotless raised a jurisdictional objection to the Commission determining the substantive matters in dispute. The grounds of Spotless’ objection was that the Applicant was not an employee covered by the Agreement within the meaning of s 52 of the Act and therefore the application should be dismissed on the basis that the Applicant does not have standing to bring the application.

[8] The jurisdiction of the Commission to deal with the matter must, as a consequence of Spotless’ objection, be determined prior to consideration of the substantive dispute.

Questions for arbitration

[9] Subject to resolution of Spotless jurisdictional objection the following questions fall to be determined:

1. Does the Applicant’s rate of pay determine what his classification is under the Agreement?

2. Should the percent wage increases set out in clause 3.1.1 of the 2016 Agreement be applied to the actual rates of pay of the Applicant?

The hearing

[10] The Applicant was self-represented in the hearing and in addition to giving evidence himself called two other witnesses:

Mr John Walsh: Contract Administrator with Spotless

Mr Anthony Jones: Electrician with Spotless

[11] The Company was represented by Ms Katherine Aistrop of the AI Group. Ms Aistrope called the following witnesses:

Mr Peter Thorpe: Operations Supervisor with Spotless

Mr Gavin Clinch: National Operations Manager with Spotless

Applicant’s case

Evidence of Mr Aden Rosewarne

[12] The Applicant gave evidence that he commenced employment with Spotless in 2003 as a “maintenance manager/electrician” and was classified at Level 1 under the then enterprise agreement although he was being paid within the Level 4 salary band. He requested a pay review in 2010 due to his trade qualifications, experience and knowledge of complex systems. 2 He further stated that Spotless offered to support him complete a Management Diploma on completion of which he would receive a pay rise.3

[13] The Applicant stated that he completed his Management Diploma in June 2012 4 and received a pay increase from Level 4 to Level 65 under the classification bands in the then enterprise agreement. On completion of his Management Diploma the Applicant sought to negotiate a new salary in the range of $80,000 - $90,000 which was above the then minimum Level 6 salary of $73,325.6 The Applicant stated that while he received a pay increase he was not reclassified at that time. He was subsequently reclassified from Level 1 to Level 4 in 2014.

[14] In 2016, Spotless lost the Commonwealth Law Courts contract. This was a key contract for Spotless on which the Applicant had been engaged as an electrical tradesperson. The absence of alternate contracts to which the Applicant could be transferred raised the prospect of redundancy. 7 He was offered a new role as an alternative to redundancy8, the role being that of a Facilities Manager on the basis of 2.5 days per week with the balance of time spent on electrical trades work on the Department of Health and Human Services (DHHS) contract. His terms and conditions were to remain unchanged from that of his former role.9

[15] The Applicant gave evidence that his previous electrical tradesperson role on the Commonwealth Law Courts contract included contract management responsibilities 10 which were recognised by Spotless, as evidenced by its support for the Applicant to complete a Management Diploma.

[16] The Applicant gave evidence that in the new role that he took up in 2016 he assumed responsibility for the management of over 7 contracts 11 including the key contract of CCA. The responsibilities in managing those contracts includes:

(i) responsibility for managing other contractors;

(ii) issuing scopes of work to staff or contractors;

(iii) client liaison;

(iv) Providing reports to CCA;

(v) Invoicing;

(vi) Developing and submitting quotes; and

(vii) Project management. 12

[17] While not conceding that that he was primarily engaged in Facilities Manager work, the Applicant accepted that he had a degree of autonomy. He also confirmed that his Facilities Manager duties took priority over “hands on” trades work 13 even though he claimed to spend the majority of his time on electrical trades work.14

[18] The Applicant gave evidence that he had not received the last three wage increases under the 2016 Agreement and that his salary of $89,749.92 had fallen below the current minimum Level 6 salary in the Agreement of $92,355. He further stated that he had received all pay increases under the Spotless Facility Services Pty Ltd (Maintenance) Victorian Enterprise Agreement 2012 15 (2012 Agreement) even though he was in receipt of a salary above the minimum Level 6 salary during the term of the 2012 Agreement’s operation.

[19] When pressed during his evidence as to the proper meaning of the classification bands and descriptors in the Agreement, the Applicant conceded that the Management Diploma that he had completed was not a “Diploma Course in the relevant trades” for the purposes of determining the correct classification under the Agreement. 16 He maintained however that the Management Diploma was an appropriate qualification for the role that he has been performing and that he received a salary in excess of the Level 6 minimum salary on his completion of the Management Diploma in 2012.

Evidence of Mr John Walsh

[20] Mr Walsh gave evidence that he had worked on the Commonwealth Law Courts contract in the role of contract administrator and in that role had liaised directly with the Applicant during the period 2007 – 2016. Mr Walsh stated that he understood the Applicant’s role at that time to include a range of duties including: onsite trades duties, sub-contractor management, supervision of other Spotless staff, contractor job allocation, client liaison, quote preparation, monthly reporting and invoice checking and approval. 17 Mr Walsh conceded that he had not been the Applicant’s line manager during that period.

Evidence of Mr Anthony Jones

[21] Mr Jones has been employed by Spotless under the terms of both the 2012 Agreement and 2016 Agreement. He gave evidence that as a Level 3 tradesperson, he received a pay increase in April 2015 that was less than the increase provided for in the 2012 Agreement because he was, at that point, being paid a salary above the Level 3 band. Along with 2 other employees in a similar position, he initiated a dispute but subsequently withdrew from the dispute prior to the scheduled hearing. His withdrawal was due to his having been reclassified from Level 3 to Level 4 which resulted in him receiving the full salary increase. 18

[22] Mr Jones conceded during cross-examination that he was reclassified from Level 3 to Level 4 as a consequence of his possession of relevant qualifications that justified reclassification under the 2012 Agreement and it was because of that reclassification that he received the full salary increase. 19

Applicant submissions

[23] The Applicant submits that he had received all annual salary increases provided for under the 2012 Agreement even though he had, during that period, been on a salary above the minimum Level 6 salary. The Applicant also submits that the past practice of Spotless had been to pass on the full percentage increase provided by the applicable enterprise agreement, even where staff were in receipt of salaries above their relevant classification salary bands. He submits that he had received no salary increases under the 2016 Agreement on the basis that he was receiving a salary above the salary band of his classification, that of Level 4.

[24] The issue in dispute in the present matter had, according to the Applicant, been raised in similar terms in an earlier dispute before the Commission determined by Commissioner Ryan in Pinjou and Koutsaftis v Spotless Facility Services Pty Ltd 20(Pinjou and Koutsaftis).

[25] The Applicant drew attention to the Commissioner’s conclusion in that matter that there had been a past practice that he (the Commissioner) directed should continue to occur, but only until 31 March 2016. The relevant extracts from the decision in that matter follow:

“[4] I do not accept that there is ambiguity or uncertainty in the terms of the wages clause or the wages schedule to the agreement. I do accept that the dispute resolution procedure gives me jurisdiction to deal with the dispute over the actual rates of pay of both of the Applicants concerned.

[5] It appears to me that, consistent with the practice adopted by Spotless in having provided wage increases in accordance with the Agreement to the actual wage rates of both the Applicants, that that should continue but only until 31 March 2016, which is the nominal expiry date of the Agreement.

[6] Both of the Applicants have no entitlement as a result of my decision to maintain their increased actual wage rates beyond 31 March 2016. Whatever wage rates they have an entitlement to beyond that date will be determined by whatever occurs in the enterprise bargaining negotiations, and whatever become the terms of agreement. Now knowing sometimes that agreements take a long time to negotiate and they are never done before the nominal expiry date, if at some point of time the parties are going to be running out of time and not have the actual wage rates for these two employees determined as from 1 April 2016, then you can come back and revisit the issue for interim orders.

[7] I am very careful to only make a decision that relates to what has been occurring up till the present and only protecting the status of the employees. I think that there are strong contractual arguments for the employees to say that they should have it. I think that there are strong industrial relations reasons for the employees to say they should have it. It is simply consistent with what has been going on, and that practice should continue for these two employees but until no later than 31 March 2016. In other words, it is a free for all after that date.

[8] It could very well be that the wages are decreased for those employees or anything else could happen, but I am not prepared to provide beyond 31 March 2016. That is because now that the issue has been ventilated, this will be an issue which the parties need to specifically address next time. Whether it is two employees or 10 employees or a range of employees across the company, wherever this situation occurs the parties should have explicit arrangements in place for dealing with people who are paid above agreement rates of pay.” 21

[26] As regards to Spotless’s jurisdictional objection, the Applicant referred to the timesheet analysis which revealed that he was spending more than half of his time on trades duties covered by the Agreement. He further referred to correspondence from Spotless in 2016 on the loss of the Commonwealth Law Contracts contract in which his move to a new role was confirmed as being on the same terms as his previous role.

Respondent’s case

Evidence of Mr Peter Thorpe

[27] Mr Thorpe gave evidence that he is employed by Spotless in the role of Operations Supervisor, and has been in the role for approximately 10 years. The role involves the supervision of a team responsible for the provision of facility maintenance services for various contracts with the majority of his work being for Youth Justice Custodial Services, Department of Justice, which involved work previously with the DHHS. 22

[28] Mr Thorpe stated that prior to January 2018, he reported to the National Operations Manager Gavin Clinch, but since then has reported to Mr Jeff Collins who is the Operations Manager for Government Contracts in Victoria and Western Australia.

[29] Mr Thorpe stated that in around June 2016 he was approached by Mr Reg Dixon, Victorian Operations Manager for Business and Industry, to see if Mr Thorpe was able to use the Applicant as an electrician on the DHHS contract given the Applicant’s then role was due to become redundant as a consequence of the loss of the Commonwealth Law Courts contract. 23 He stated that there was not enough work at the time to justify a full time electrical trades role on the DHHS contract, but he was aware that Mr Dixon was also speaking to the Applicant about moving into a Facilities Manager role. The combined Facilities Manager/electrician role was subsequently agreed and implemented and Mr Thorpe, while not directly involved, was aware that a letter confirming the new role was subsequently provided to the Applicant.24

[30] Mr Thorpe gave evidence as to the contracts that the Applicant was responsible for, which included, CCA, Siemens, Ministry and Parliamentary Services, Bureau of Meteorology at Cerberus, Baker Hughes, Kenwood Superannuation, The Club (Caroline Springs) and three Department of Justice properties. 25

[31] While not having visibility of the CCA contract for which the Applicant reported to Mr Clinch, Mr Thorpe detailed the duties of the Applicant on the other contracts. 26 He confirmed that while he supervises the Applicant with respect to his DHHS duties, the Applicant reports directly to Mr Clinch because of the CCA contract.

[32] Mr Thorpe provided copies of timesheets completed by the Applicant for the period 25 September 2017 to 20 March 2018, which revealed both trades and Facilities Manager work undertaken by the Applicant during that period. Mr Thorpe gave evidence that electrical trades work was identifiable on the timesheets by use of a job number. 27 While not having completed a detailed analysis, Mr Thorpe expressed a view that the timesheets showed a 50:50 split between electrical trades and Facilities Manager duties.28

[33] An analysis conducted by the Commission of the timesheets provided by Mr Thorpe revealed the following split in the time spent by the Applicant on Facilities Manager and electrical trades work. Approximately 45% of the Applicant’s time was spent on Facilities Manager work during the period 25 September 2017 to 20 March 2018, with the balance of time spent on trades work. No evidence was adduced or submissions made that suggested that the period of September 2017 to March 2018 was not representative of the Applicant’s pattern of work.

Evidence of Mr Gavin Clinch

[34] Mr Clinch gave evidence that he is currently employed as National Operations Manager; he has held the role for 2 years and in that role is responsible for a number of contracts including the CCA contract. He gave further evidence that the Applicant has reported to him for approximately 18 months but was not involved in the discussions that led to the Applicant taking his current role. 29

[35] Mr Clinch stated that the Applicant commenced employment with Spotless on 1 December 2003 and he referred to the Applicant’s original employment contract which specified his classification as Electrician. The Applicant signed a Position Description on commencement titled Electrical Maintenance – Team Leader. 30 Mr Clinch stated that a Change of Employment Details Form was completed to reflect the Applicant’s change in role in 2016 from that of Senior Electrician to Facilities Manager.31 No position description was provided by Mr Clinch that described the duties and responsibilities of the Applicant in his current role.

[36] Mr Clinch acknowledged that the Applicant possessed a Management Diploma qualification but stated that such qualification was not a trade related qualification nor was he aware that the Applicant held any other relevant post-trade qualification. Mr Clinch referred in his evidence to the duties undertaken by the Applicant in relation to the Facilities Manager component of his role and confirmed that such duties did not involve hands on work. 32

Respondent submissions

[37] Spotless submits that the application should be dismissed for want of jurisdiction due to the Applicant not being entitled to the benefit of the dispute resolution procedure. This was, according to Spotless, because the Applicant was not covered by the Agreement as:

(1) the Applicant was not engaged in a classification under the 2016 Agreement as required in clauses 1.2.1 and 1.2.2 which states:

“1.2.1 This Agreement shall apply to:

1.2.2 Spotless Facility Sevices Pty ltd, referred to as “the Company” and employees engaged in classifications prescribed in it and are performing work described in sub clause;

………….” and

(2) The Applicant was not performing work as described in Sub-clause 1.2.3 of the Agreement which states as follows:

“1.2.3 Employment conditions and rates of pay of employees of the Company employed on maintenance and refurbishment work, under commercial contracts held by the Company with clients and which is incidental to the maintenance contract, in any of the classifications set out in this Agreement or the Awards referred to in clause 1.5.”

[38] While conceding that the Applicant undertook some duties that fell within the scope of the Agreement, Spotless submits that the Applicant was not employed on “maintenance and refurbishment work”, as the principal purpose of the Applicant’s role was that of a Facilities Manager, not that of an electrician. Spotless referred to the Full Bench authority of The Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd (Teys) 33 which it submits confirmed the proper approach to determining the application of an agreement to a particular person’s employment.

[39] In summary Spotless submits that:

(1) the Applicant’s position changed in 2016 from that of Senior Electrician to Facilities Manager (current role);

(2) the Applicant’s current role substantively involves management of a number of facilities management contracts, the most significant one being that of the CCA contract; and

(3) the Applicant performs substantial work of a management nature, as opposed to being on the tools.

[40] Spotless further submits that if the Commission were to find that it had jurisdiction to deal with the matter, then the dispute questions for determination should be answered as follows:

(1) No. The Applicant’s rate of pay does not determine his classification under the 2014 Agreement; and

(2) No. The percentage wage increases set out in clause 3.1.1 of the Agreement should not be applied to the actual rates of pay of the Applicant. They are only relevant to the minimum rates of pay required to be paid.

[41] Spotless referred to Clause 3.1.1 of the Agreement which provides for rates of pay and classifications and submits that there was nothing in the wording of that clause that required an employee to be classified according to their pay rate. Rather, a person’s classification was dependant on their trade and relevant post trade qualifications.

[42] As regards the application of wage increases to actual wage rates, Spotless distinguished the wording of Clause 3.1.1 of the 2016 Agreement from that of clause 3.1.1 of the 2012 Agreement which was subject to a decision of Commission Ryan in Pinjou and Koutsaftis. Spotless drew attention to the fact that the Commissioner was clear in limiting his decision to the specific employees Mr Pinjou and Mr Koutsaftis and also to the period of the operation of the 2012 Agreement. The absence of detailed reasons in the Commissioner’s decisions was also raised by Spotless as a further reason why it was not possible to identify its relevance to the present matter.

[43] Spotless submits that the language of Clause 3.1 was clear and unambiguous in that the specified rate increases are to be applied to the minimum classification rates and there was no wording in the clause that required the increases to be applied to actual rates of pay.

Approach to construing enterprise agreement terms

[44] The approach to construing enterprise agreements was most recently set out in a Decision of a Full Bench of the Commission in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 34 as follows:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

Jurisdictional Objection – Is the Applicant covered by the Agreement?

[45] In order for me to proceed to determine the substantive dispute before me, I must firstly be satisfied that:

(1) The Applicant is covered by the Agreement pursuant to s 52 of the Act;

(2) The necessary steps required under the Dispute Settlement Term have been followed prior to the matter being referred to the Commission; and

(3) The 2016 Agreement Dispute Settlement Term confers power to the Commission to arbitrate the matter in dispute.

[46] Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. The Agreement contains such a term which is clause 1.9 Dispute Resolution Procedure. The relevant sub-clauses going to the jurisdiction of the Commission in the settlement of disputes are as follows:

“1.9 Disputes Resolution Procedure

A major objective of this Agreement is to eliminate lost time and/or production arising out of grievances and dispute. Disputes over any work related or industrial matter or any matters arising out of the operation of the Agreement or incidental to the operation of the Agreement should be dealt with as close to its source as possible. Disputes over matters arising from the Agreement (or any other dispute related to the employment relationship), the National Employment Standards or the Fair Work Act 2009 shall be dealt according to the following procedures.

……………..

1.9.5 Where the matter remains unresolved, the employee, employee representative or the Company may refer it to the Fair Work Commission for determination by conciliation and/or arbitration……”

[47] It was not in dispute, and I am satisfied, that the parties have taken the required preliminary steps in an effort to resolve the dispute thus complying with the dispute resolution provision of the Agreement. Further, I am satisfied that the Commission has jurisdiction to arbitrate the matter under the terms of Clause 1.9 Dispute Resolution of the 2016 Agreement subject to determination of the jurisdictional objection raised by Spotless regarding the Applicant’s standing.

[48] I accept that in order for me to ascertain whether the Applicant is covered by the 2016 Agreement, it is necessary to determine the coverage of the Agreement and whether the “principle purpose” or “major and substantial” employment of the Applicant’s work falls within that coverage. Helpful authority for this task is found in various Full Bench decisions which I will now refer too.

[49] In Leigh Carpenter v Corona Manufacturing Pty Ltd 35, the Full Bench was dealing with an appeal of a decision of Commissioner Whelan36 in which she dismissed an application for unfair dismissal relief on the basis that the applicant was found to be award free and earning in excess of the high income threshold. In determining the appeal, the Full Bench examined the duties of the appellant and the coverage of the Award. In affirming the Commissioner’s decision and dismissing the appeal the Full Bench relevantly said as follows:

“[9] In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed.[5] In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not "employed in the process, trade, business or occupation of ... soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials" and was not, therefore, covered by the Award.”

[50] In R Brand v APIR Systems Limited 37, a Full Bench was considering an appeal of a decision of Commissioner Deegan38 in which the Commissioner dismissed an application by Mr Brand for relief in respect of his dismissal by APIR under s 170CE of the Workplace Relations Act 1996. The Commissioner had dismissed the application because Mr Brand was found to be award free and earning in excess of the high income threshold. The Full Bench examined the duties of Mr Brand and the coverage of the relevant award and stated:

“[12] Much of the argument advanced on Mr Brand's behalf in the appeal was directed at whether his employment was within the incidence of the award. As we have indicated above, even if his employment was within the incidence of the award, his application was not within jurisdiction unless he was employed in one of the award classifications.

[13] We note that the Commissioner adopted and applied a test based on the principal purpose for which the applicant was employed. She relied upon the Full Bench decision in Carpenter v Corona Manufacturing Pty Ltd in that respect.^[10] An analysis of the authorities referred to in that case shows that industrial courts and tribunals have at different times adopted different formulations of the test to be applied in determining whether the work of an employee or group of employees is within a particular occupation or classification. One formulation requires that the question should be decided by reference to the major and substantial employment of the employee.^[11] Another formulation requires that the principal purpose or purposes of the employment be identified.^[12] In some cases the formulations have both been referred to.^[13] In one case a Full Bench of the Commission held that the principal purpose formulation was a refinement of the major and substantial employment formulation.^[14] A Full Court of the Federal Court of Australia, without reference to other authorities, adopted a test based on whether the employees were "engaged substantially" in the duties of the relevant occupation.^[15]

[14] In this appeal both parties accepted that the "principal purpose" formulation as stated in Carpenter v Corona Manufacturing Pty Ltd should be applied. We are content to decide this application on that basis. We should add, however, that we are satisfied that whichever of the formulations referred to might be applied, in this case the result would be the same.”

[51] More recently in Teys a Full Bench had reason to consider the relevant coverage of an Agreement and whether the work performed by particular persons fell within the coverage of the Agreement. In that matter, coverage was relevant for the purpose of establishing those employees that were entitled to vote in a ballot for a proposed agreement. In upholding the appeal, the Full Bench referred to and applied the reasoning of R Brand v APIR Systems Limited when it stated:

“[83] In determining whether the work of an employee who was a “Trainee Supervisor” at the time of the vote is covered by the classifications contained in the 2013 Agreement more than part of that work needs to be considered.

……………..

[85] In Brand and each of the cases cited in this extract from Brand, whether it is a “principal purpose”, “major and substantial” or “engaged substantially” formulation that is adopted, it is the work of the employee that is considered relevant in that regard.

[86] On any of the formulations set out in Brand, it is apparent that the work of an employee who was a “Trainee Supervisor” at the time of the vote is not work covered by the classifications contained in the 2013 Agreement. The major and substantial part of the work of an employee who was a “Trainee Supervisor” at the time of the vote, or the principal purpose of their work, or the work on which such an employee was engaged substantially was the aforementioned supervisory tasks. It was not the tasks at classifications Levels 1 to 6 or the Night Cleaners classification contained in the 2013 Agreement.”

[52] In order to apply the principles summarised in the above-referred cases it is necessary for me to first establish the coverage of the 2016 Agreement and the work that the Applicant is undertaking in his current role.

[53] The coverage of the Agreement is found at clause 1.2 of the Agreement where it provides as follows:

“1.2.1 This Agreement shall apply to:

1.2.2 Spotless Facility Sevices Pty ltd, referred to as “the Company” and employees engaged in classifications prescribed in it and are performing work described in sub clause;

………….

1.2.3 Employment conditions and rates of pay of employees of the Company employed on maintenance and refurbishment work, under commercial contracts held by the Company with clients and which is incidental to the maintenance contract, in any of the classifications set out in this Agreement or the Awards referred to in clause 1.5.”

[54] Based on a plain reading of clause 1.2, I am satisfied that the Agreement would cover the Applicant’s employment if he is:

(i) employed on maintenance and refurbishment work;

(ii) that the maintenance and refurbishment work is undertaken under commercial contracts entered into by Spotless; and

(iii) the Applicant is engaged in a classification prescribed in the 2016 Agreement.

[55] The classifications in the Agreement are described as follows at clause 3.1.1 of the 2016 Agreement:

Level 1	Assistant to Tradesperson
Level 2	Base Tradesperson For example – Technician has completed apprenticeship. Successfully completed recognised trades qualification)
Level 3	Registered/Licensed Tradesperson (Electrician, Plumber, Ref Mechanic e.g. as trade recognised post trade qualifications) Technician has passed all requirements of testing regime (in addition to being a base tradesperson)
Level 4	Registered/Licensed Trades with postgraduate qualifications Training is specified as ½ completion Diploma Course in the relevant trades (or completion of Certificate 4 or equivalent formal recognised training).
Level 5	Dual Trades (Capable of completing two separate trades as per Level 3 Technician)
Level 6	Dual Trades (capable of completing two separate trades as per Level 3 Technician) with Diploma (or formal equivalent formal recognised training) in relevant trade. Single Trade with completed Diploma (or equivalent formal recognised training).
Level 7	Technical Officer

[56] That component of the Applicant’s current role comprising tradesperson duties is understood to be that described generically in the position description provided to the Applicant on commencement in 2003. 39 There was no position description adduced in evidence for the Facilities Manager role in 2016. Nor was evidence adduced that the electrical tradesperson duties required to be performed by the Applicant as part of his Facilities Manager role were substantively different to the duties of the Applicant’s former role at the Commonwealth Law Courts, save for the difference in clients that the Applicant was required to service. The 2003 position description relevantly provided as follows:

“Responsibility Statement

The tradesperson/technician, under limited direction, will be required to deliver maintenance services, relating to fixed plant and equipment under contractual arrangements with the Spotless Property and Facilities clientele……”

[57] I am satisfied that the duties described in the Applicant’s 2003 position can be properly described as “maintenance and refurbishment work” on “commercial contracts” held by Spotless, as required under the Scope clause of the 2016 Agreement. Such a finding is supported by the evidence of Mr Clinch as to the contracts in place that Spotless is required to service across its portfolio. It necessarily follows that subject to my findings on the “principal purpose” or “major and substantial” work of the Applicant, if the Applicant is also found to be engaged in a classification under the 2016 Agreement, then he will be covered by the 2016 Agreement.

[58] The Applicant transferred from his former role as a Senior Electrician servicing the Commonwealth Law Courts contract to that of a Facilities Manager role in 2016 with no change in his remuneration. The Applicant remained classified at Level 4 under the 2016 Agreement. It is evident that at the time of the role transfer Spotless did not regard the change in role as particularly significant as they confirmed in correspondence to the Applicant that his terms and conditions would remain unaltered. 40

[59] While classified as a Facilities Manager from 2016, the title of the role is not determinative of what the “principal purpose” is or what the “major and substantial” employment of the Applicant is. It is clearly necessary to look beyond the classification title. Were it otherwise, than all that would be necessary for Spotless to avoid coverage of the 2016 Agreement would be for Spotless to classify an employee in a role not prescribed by the Agreement.

[60] Spotless sought to characterise the Facilities Manager role as different to that of the Applicant’s former role as a senior electrician. It did not however provide a position description of the duties required of the Applicant in the Facilities Manager role or a comparison of those duties with the duties formerly undertaken by the Applicant as a Senior Electrician, in which capacity he received a Team Leader allowance. Significantly, both the Applicant and Mr Walsh gave unchallenged evidence that the Applicant was performing, at least in part, some similar duties in his former Senior Electrician role at the Commonwealth Law Courts with that of the Facilities Manager role the Applicant now holds.

[61] Notwithstanding the absence of a position description for the Facilities Manager role and the claimed overlap of some duties from the Applicant’s former to current role, the evidence of both Spotless and the Applicant appeared to align with respect to those duties and responsibilities that fall into the Facilities Manager role as distinct from hands-on electrical trades duties. Those duties can be summarised as including:

(i) Contract client liaison;

(ii) Participate in regular client meetings;

(iii) Managing sub-contractors;

(iv) Issuing scopes of work;

(v) Production of monthly reports for clients

(vi) Manage sub-contractor compliance and safety;

(vii) Client invoice preparation and approval;

(viii) Quoting/tender preparation; and

(ix) Project management of contractors and scopes of work.

[62] The evidence furnished by Spotless by way of the Applicant’s timesheets indicates that he is engaged in Facilities Manager work for up to 45% of the time, with the remaining 55% of his time spent on performing electrical trades work. While I accept that the “principal purpose” of the role is not determined by a simple arithmetic calculation, it cannot be said that the time spent by the Applicant on Facilities Manager duties comprised the “major and substantial” component of his work.

[63] Spotless nonetheless argues that the Applicant is substantively engaged on Facilities Manager work. While that may be the case based on his spending up to 45% of his time on such work, it is also true in my view, that the Applicant is substantively engaged on electrical trades work as evidenced by his spending at least 55% of his time on such duties.

[64] Spotless also argues that the Applicant performs “substantial work of a management nature, as opposed to being on the tools.” While it unarguable that a substantial amount of the Applicant’s time is spent on work of a management nature, I do not accept the submission that such time is substantial “as opposed to being on the tools.” The submission of Spotless suggests that a greater proportion of the Applicant’s working time is spent on managerial work than on electrical trades duties, a submission that is clearly at odds with the timesheet evidence.

[65] In any event, it is not the test that the Applicant is “substantively engaged” or that he performs a “substantial” component of his work on management duties as opposed to electrical trades work. For the purpose of the present matter I am satisfied that the relevant tests are that of what the “principle purpose” of the Applicant’s role is or what the “major and substantial” work is that the Applicant is engaged in. The present matter is somewhat different factually to the Commission Full Bench authorities referred to above, as in those cases it was clear that the award covered work of the relevant employees was a relatively smaller component of their work by comparison to the non-award covered work. That is not the case in the present matter as a finer balance exists between the work that is unarguably electrical trades work and those duties and responsibilities clearly falling under the Facilities Manager scope of duties.

[66] While I accept that the “principal purpose” of the role is not determined by a simple arithmetic calculation, I have had regard to the actual time spent by the Applicant on each area of his work, that of the Facilities Manager and electrical trades work. I have also had regard to the apparent intent of Spotless when it transferred the Applicant into the Facilities Manager role in mid-2016 in that it explicitly maintained his pre-existing conditions of employment. Balanced against those factors is the evidence of Spotless as to what it regards as the key focus and priority to be given by the Applicant to Facilities Manager duties. On fine balance, I am satisfied that both the “principal purpose” and the “major and substantial” component of the Applicant’s work is that of electrical trades work.

[67] By reason of my finding as to the “principal purpose” or “major and substantial” employment of the Applicant, I am satisfied that the Applicant is engaged in an electrical trades classification per clause 3.1.1 and is consequently employed on maintenance and refurbishment work undertaken on commercial contracts per clause 1.2.3 of the 2016 Agreement. The Applicant’s employment is therefore covered by the 2016 Agreement. It consequently follows that the Commission has jurisdiction to determine the substantive dispute and I will now proceed to do so.

Does the Applicant’s rate of pay determine what his classification is under the Agreement?

[68] The construction of an agreement, like that of statute or an award, begins with a consideration of the ordinary meaning of the words. That is clear according to the principles summarised in Berri. Spotless submits that the terms of the clause are clear in that an employee is classified according to the qualifications held, whereas the Applicant submits that the rate of pay should determine the classification level.

[69] Clause 3.1.1 sets out the salaries of the 2016 Agreement. There are seven classification levels ranging from Level 1 Assistant to Tradesperson up to Level 7 Technical Officer. Each of the descriptors for Levels 2 – 6 of the 2016 Agreement detail the trade and post trade qualifications required at each level. Self-evidently, a higher classification level requires higher qualifications under the 2016 Agreement. For example, a base tradesperson would be entitled to a Level 2 classification, whereas a Dual Tradesperson with relevant post trades qualifications would be entitled to be classified at Level 6 under the 2016 Agreement. A classification structure that requires increasing qualifications and/or skills at higher classification levels is an entirely orthodox approach.

[70] I do not accept that there is any ambiguity in clause 3.1.1 of the 2016 Agreement. The clause has a plain meaning, that is, an employee’s classification is driven by the trade and relevant post-trade qualifications held by the employee, not the rate of pay the employee may be actually receiving. The rate of pay received by the employee is a consequence, at least in part, of an employee’s classification, not a determinant of the classification level. Furthermore, there was no evidence adduced or submissions made regarding the context or surrounding circumstances that would in my view displace the plain meaning of clause 3.1.1 the 2016 Agreement.

Should the percent wage increases set out in clause 3.1.1 of the Agreement be applied to the actual rate of pay of the Applicant?

[71] It was not contested that the Applicant is currently classified at Level 4 under the 2016 Agreement and is in receipt of a salary of $89,749.92. The current salary band for Level 4 is $79,967 - $86,725. Nor was it contested that the Applicant’s salary was set at Level 6 on completion of his Management Diploma in 2012, notwithstanding he was not re-classified to Level 6 at that time. The Applicant has not received a salary increase during the life of the 2016 Agreement and as such the Applicant’s salary has now fallen below the current Level 6 minimum salary of $92,355 but remains above that of the Level 4 salary band. The Applicant contends a construction of clause 3.1.1 of the 2016 Agreement that would result in salary increases under the Agreement being applied to his actual salary.

[72] In support of the Applicant’s construction, reliance was placed by him on the decision of Commissioner Ryan in Pinjou and Koutsaftis and what the Applicant claims is the custom and practice of Spotless. Specifically, that the increases provided for in the Agreement have historically been applied to the actual salaries of employees.

[73] Spotless in reply contend that the wording of clause 3.1.1 is unambiguous and has a clear meaning. Specifically, that the clause requires the salaries set out in the salary bands and minimum salaries of the 2016 Agreement to be adjusted by the prescribed percentages. There was, according to Spotless, no wording in the 2016 Agreement that requires the actual salary of an employee to be preserved or increased in line with the prescribed salary band percentage increases. As regards the Pinjou and Koutsaftis decision, Spotless submits it had little or no relevance as clause 3.1.1 in the 2016 Agreement was materially different to the relevant clause in the 2012 Agreement which precipitated that dispute. As regards the custom and practice claimed by the Applicant, Spotless submits that it was irrelevant in circumstances where the plain meaning of the wording of the clause was clear.

[74] I now turn to consider the relevant provisions of the 2016 Agreement. Clause 3.1.1 deals with salaries and allowances and relevantly states that:

“3.1.1 The salaries and allowances set out in the Agreement shall be increased as follows:”

[75] Clause 3.1.1 then sets out the salaries and allowances in a table form which provides for 7 classification levels. Each of the classifications from Levels 1 - 5 prescribes a salary band range. For example, the Assistant to Tradesperson classification provides for a range of $58,945 - $61,404 from 1 April 2016. Classifications Level 6 and Level 7 simply provide for a minimum salary, as opposed to a salary band.

[76] Clause 3.1.1 also provides for annual increases of: 2% from 1 April 2016, 2.5% from 1 April 2017 and 2% from 1 April 2018 to be applied to the salaries set out in the 2016 Agreement. Those percentage increases are applied to and reflected in the adjusted salary bands for Levels 1 - 5 and to the minimum salaries for Levels 6 and Level 7 in each of the years 2016, 2017 and 2018.

[77] The structure of the salaries clause in the 2016 Agreement is different to that of the 2012 Agreement. In the 2012 Agreement, the relevant salaries clause at 3.1.1 stated as follows:

“3.1.1 The salaries and allowances set out in the Agreement shall be increased as follows;

• 4% from the first full pay period on or after approval from Fair Work Australia

• 4% from the first full pay period on or after 1 April 2013

• 4% from the first full pay period on or after 1 April 2014

• 5% from the first full pay period on or after 1 April 2015”

[78] The 2012 Agreement then provided for a separate table of salaries at Appendix 1 which reflects the annual increments prescribed in clause 3.1.1. The table at Appendix 1 provided for a 7 level classification structure with identical classification definitions to that contained in the 2016 Agreement and salary bands for Level 1 - 5 and minimum salaries for Level 6 and Level 7.

[79] The changes from the 2012 Agreement to 2016 Agreement are not in my view material despite Spotlesss’ contention to the contrary. The classification structure and definitions are the same. The structuring of salary bands for Levels 1 – 5 and minima for Levels 6 and Level 7 adopted the same approach of applying the prescribed increments to those various salary bands and salary minima. Importantly, key wording in the salary clauses in both the 2012 Agreement and 2016 Agreement are identical and relevantly state that: “The salaries and allowances set out in the Agreement shall be increased as follows.” In short, I regard the changes to the salary clause from the 2012 Agreement to the 2016 Agreement as being a change of style rather than substance.

[80] It is clear when reading the salary tables in clause 3.1.1 of the 2016 Agreement that employees are entitled to receive a salary according to their classification. In the case of those employees classified at Level 1 – 5, the individual’s salary is set having regard to the prescribed salary bands with the minimum salary in the band setting the floor below which an employee at that particular classification level could not be paid. In the case of employees classified at Level 6 and Level 7, they are entitled to receive a salary no less than the minimum salary set for each of those classifications.

[81] The plain meaning of the wording of the 2016 Agreement is also clear in my view and that is that the increases provided for in clause 3.1.1 are to be applied to the salaries and allowances set out in the clause. There is no requirement expressed in clause 3.1.1 that employees are to receive salary increases applied to their actual salaries according to the increments provided for in the 2016 Agreement. In my view, the wording of the clause is explicit in its reference to the adjustment of the salaries “set out in the Agreement” and is not ambiguous.

[82] The Agreement is silent on how individual salaries are set within the salary bands; whether individual salaries set above the minimum may be subject to salary increase absorption; how increases are to be applied in circumstances where individual salaries are above minimum salaries; and whether individual salaries may be increased within a band based on performance or other factors at the discretion of Spotless. I am not persuaded that ambiguity exists with respect to the clause simply by reason of the silence of the Agreement on individual salary rate adjustments processes.

[83] There is a long history of agreements covering Spotless’s facilities maintenance services and it appears on a review of those agreements dating back to at least 2005, that the classification and salary banding structure has not altered during that period, save for the changes in the salary clause structure that I have previously referred too. Unhelpfully, neither party sought to adduce evidence as to the objective intent of the parties in the negotiation of the 2016 Agreement or its predecessor agreements. Nor did the parties seek to address the surrounding context or circumstances of the clause beyond the Applicant’s submissions on custom and practice.

[84] I am satisfied that Spotless has historically applied the salary increases to the actual salaries of employees. The departure from that approach provoked the dispute dealt with by Commissioner Ryan in Pinjou and Koutsaftis which involved a similar set of factual circumstances. The Commissioner in that matter dealt with the dispute over the meaning of clause 3.1.1 of the 2012 Agreement.

[85] The Commissioner reached a conclusion that the meaning of clause 3.1.1 was clear and unambiguous and that increases provided for in 2012 Agreement should continue to be applied to actual salaries, but only for the term of the agreement. However, the Commissioner’s reasoning is unclear and his decision appeared to have been strongly influenced by Spotless’ custom and practice. I respectfully disagree with the Commissioner’s conclusions. I have necessarily taken a cautious approach to placing reliance on extrinsic material (i.e. custom and practice) in circumstances where the plain language of the clause is clear.

[86] I am satisfied that Spotless will be in compliance with the 2016 Agreement providing that an employee is in receipt of a salary that is in excess of the minimum salary for his or her classification level at any given time. The mechanism for delivering salary increases to individuals is simply not dealt with in the 2016 Agreement. It is only the agreed periodic incremental adjustments of the salary bands and minima that are prescribed at clause 3.1.1.

[87] While not relevant to my conclusions regarding the ordinary meaning of clause 3.1.1, I would observe that the construction advanced by the Applicant would, if accepted, fetter the ability of Spotless to flexibly manage salaries of its employees within the salary bands set by the 2016 Agreement. The Applicant’s construction would in my view deny Spotless an ability to recognise and reward performance, or respond to labour market fluctuations in a manner that allowed it to attract and retain staff.

[88] While no evidence was adduced as to the objective intent of the parties in establishing the classification structure, I don’t believe it could have been the intention to impose a rigid one size fits all salary structure. If that had been the intention of the parties, then the provision of salary bands and salary minimums would have been quite unnecessary. I also note that the Applicant on completion of his Management Diploma did not feel constrained by the classification and salary band structure in 2012 when he sought to negotiate a salary for himself that was well in excess of his classification level at the time.

[89] I am satisfied that the language of clause 3.1.1 is clear and unambiguous for the reasons outlined above and that the salary increases provided for are to be applied to the salary bands and salary minima set out in the salary tables of the 2016 Agreement. The 2016 Agreement is silent on the process of adjustment of individual salaries. Furthermore, there was no evidence adduced or submissions made regarding the context or surrounding circumstances that would in my view displace the plain meaning of clause 3.1.1 the 2016 Agreement.

Conclusion

[90] For the foregoing reasons the questions to be determined are answered as follows;

1. Does the Applicant’s rate of pay determine what his classification is under the Agreement? – No, an individual’s classification is determined by the relevant trade and post-trade qualifications held by the individual that are recognised in the classification structure described in clause 3.1.1.

2. Should the percent wage increases set out in clause 3.1.1 of the Agreement be applied to the actual rates of pay of the Applicant? – No. There is no requirement for the percentage increases to be applied to actual rates of pay. The requirement is that the percentage increases are to be applied to the salary bands and salary minima set out in clause 3.1.1.

[91] The dispute is determined accordingly.

DEPUTY PRESIDENT

Appearances:

Mr A Rosewarne on his own behalf.

Ms K. Aistrope on behalf of the Respondent.

Hearing details:

2018

Melbourne

14 May

Printed by authority of the Commonwealth Government Printer

1 Exhibit R2, Witness Statement of Mr. Gavin Clinch, dated 27 April 2018, Attachment GC3.

2 Exhibit A1, Witness Statement of Mr. Aden Rosewarne, p1 at paragraph [1].

3 Transcript at PN68.

4 Exhibit A4, Certificate - Diploma of Management.

5 Exhibit A3, Changes to employee details 20/06/12.

6 Exhibit A2, Email chain dated 14 June 2012.

7 Transcript at PN96.

8 Transcript at PN99.

9 Exhibit A7, document headed “Relocation to DHS Contract”.

10 Transcript at PN68, PN94.

11 Transcript at PN100.

12 Transcript at PN115 – PN124.

13 Transcript at PN114.

14 Transcript at PN79 – PN86.

15 Exhibit R2, Attachment GC4.

16 Transcript at PN68 – PN74.

17 Exhibit A10, Witness Statement of Mr. John Walsh, undated.

18 Exhibit A11, Witness Statement of Mr. Anthony Jones, dated 3 May 2018.

19 Transcript at PN181 – PN183.

20 [2015] FWC 5453.

21 Ibid at paragraphs [4] – [8].

22 Exhibit R1, Witness Statement of Mr. Peter Thorpe, dated 27 April 2018 at paragraph [1]–[2].

23 Ibid at paragraph [3].

24 Exhibit A7.

25 Exhibit R1 at paragraph [10].

26 Ibid at paragraphs [12] –[14].

27 Ibid at Attachment PT1.

28 Transcript at PN237.

29 Exhibit R2 at paragraphs [1]-[6].

30 Ibid at Attachment GC1.

31 Ibid at Attachment GC2.

32 Ibid at paragraphs [13]-[19], Transcript at PN283.

33 [2017] FWCFB 3005.

34 [2017] FWCFB 3005 at [114].

35 PR92573.

36 PR924136.

37 PR938031.

38 PR933239.

39 Exhibit R2, Attachment GC1.

40 Exhibit A7.

Aden Rosewarne v Spotless T/A Spotless Facility Services